Many businesses and organisations have announced their intention to become carbon net zero. This is possible for larger companies, but what about the small business community?
With COP26 taking place in November 2021, there will be renewed interest and demand for businesses to do more in the fight to reduce the impact of climate change. With the twin pressures of new legislation that set emissions to 78% by 2035 compared to their levels in 1990, and the demands from vocal consumers to see tangible action being taken by the businesses they buy from, the journey to net zero is no longer just a corporate concern.
However, the British Chambers of Commerce research reveals that just 9% of small businesses measure their enterprise's carbon footprint, with only 13% have set targets to reduce their emissions. In addition, almost two thirds (64%) of businesses surveyed say they don't see net zero targets as a high priority in the wake of the pandemic. However, half (49%) admit their customers are worried about the environment.
Says John Perry, managing director of supply chain and logistics consultancy, SCALA: "Research suggests that around 85% of the public are more likely to buy from companies with a positive reputation for sustainability. With today’s increasingly environmentally conscious consumer, investing in greener practices can indeed have a major impact on sales, future growth, and an organisation’s bottom line. In addition, there is frequently a tangible link between sustainability and lowered costs for businesses.”
Speaking to Croner-i: Business Inform, Caroline Swailes, co-founder of Be Ethical Training, says: "Carbon net zero, UN SDGs, green tax, COP26 — the topic of sustainability is a mine field of commitments and targets smaller businesses might be aware of, but feel is out of their reach. By creating local and achievable outcomes, smaller businesses can take steps towards these 'bigger' goals and, as a collective community, SME's can make a global impact. Now more than ever businesses need to be empowered to take steps, it doesn't have to be perfect, but it does need to be a conscious effort.”
Intuit Inc., the global technology platform powering QuickBooks, has announced its commitment to helping 30,000 small businesses in the UK make a pledge to take climate action ahead of this year’s COP26 summit. In partnership with the UK government’s #TogetherforourPlanet initiative, the SME Climate Hub and the United Nations Race to Zero campaign, Intuit QuickBooks will help empower its small business community to make a measurable, positive impact on the environment, starting with a commitment to carbon reduction.
Traditionally, small businesses do not have the resources to invest in climate-positive business practices but know it's critical for a sustainable future. "By embracing sustainability, small businesses will play a critical role in building a better and more climate-positive future," said Chris Evans, vice president and country manager UK at Intuit QuickBooks. “By providing practical guidance and resources to them, we are delighted that QuickBooks is able to take an active role in giving these small businesses tools to improve their climate credentials and thrive as we look to the future.”
Also, James Hand, co-founder of Giki — an employee engagement tool for businesses who want to cut their carbon footprints, explained to Croner-i: Business Inform that a multi-channel approach is needed for small businesses to reach net zero.
“Reaching net zero is hard and, because we cannot all just offset our way to net zero, it requires working with suppliers and customers to find low carbon solutions. Every decision needs to be framed in terms of financial and environmental cost and that’s not something that can be done alone. For anyone who is confused the SME Race to Zero is a great place to start.”
Peter Miles, CEO and Co-Founder of eHempHouse is currently on a mission to reverse the ravages of climate change by enabling organisations to offset their carbon emissions.
Is there confusion amongst the small business community about what carbon net zero actually means?
“Being a small business owner means you have a lot of things to worry about and few resources to deploy to deal with the problems. A lot of bigger businesses will assign specific staff to help the business work towards net zero. For a small business it is challenging to even understand what net zero would mean for their business, let alone to set about achieving it.”
Can you outline the challenges to become a carbon net zero business?
“The challenges are different for every sector. For example:
Is the industry, by its nature, polluting? What, if anything, can the business do about that? Are there alternative products that can be used or a new process that would reduce the pollution?
How long is the supply chain? Is it international? How can the business use its buying to drive change?
What is the attitude of employees and customers? Employees must be actively engaged in becoming carbon neutral and understand how their actions will impact this. Customers need to know that the product or service may change slightly, and you may even see a price increase. How can you educate them to accept this?”
What are the practical steps small businesses can take to become carbon net zero?
“Carry out a full audit so that you understand how the business is contributing to CO2 emissions. If possible, use an external specialist to do this work, so that is entirely disinterested. From this, you will get a clear idea of the issues and can then look at how you can manage them. A business can't achieve carbon neutral status overnight; industries have to take a threefold approach:
Replace polluting products
Develop mitigations for being able to live with the changing climate
Is there a commercial aspect to becoming carbon net zero?
“There is usually a short-term cost implication. However, increasingly key stakeholders, including customer and stakeholders, are demanding that the companies that they deal with pay attention to the environment. So called, ‘green-washing’ is easily exposed, so companies must consider this if they expect to stay in business.”
Are smaller enterprises at an advantage when moving towards net zero, as they can be more agile than larger businesses when making changes to meet emissions targets?
“Typically, a smaller business has less resources to review and drive change, but they also have less bureaucracy to navigate so can usually move more quickly. On balance I would say that smaller enterprises at a bit of a disadvantage. Achieving carbon neutral status should be the goal for all businesses; how they get there will be different for everyone. However, there are effective ways of offsetting carbon emissions through the carbon markets, so the goal is achievable for all businesses.”
Making decisions to take tangible steps towards a net zero status begins with an analysis of current emissions. The Compare, Your Carbon Footprint tool is a useful place to start.
World Kinect Energy Services Senior Director of Global Sustainability, Therese Gjerde, warns: “The 2050 deadline for net zero is a lot closer than people think and it can take time to develop a realistic, achievable strategy and even longer to implement it. Organisations must act now and start their sustainability journey by developing a long-term emissions reduction strategy that will benefit their impact on the environment. Net zero targets could be brought forward, so ignoring the deadline may lead to penalties or larger pay outs further down the line.”
With Giki’s James Hand concluding: “Where smaller firms have close relationships with suppliers, an engaged workforce who know each other and the ability to make quick decisions then, yes, they could be at a real advantage. Another big advantage, however, is likely to come from working out the big changes you can make and getting to those quickly. We’ve passed the point where small steps will get us to where we need to go.”
Creating at least a strategy to move towards net zero is possible with a raft of initiatives that the SME community can take advantage of. The pandemic has, of course, focused the minds of business leaders elsewhere. However, as we move to a post-Covid business landscape, net zero ambitions should become actions.